A coupon or coupon rate is the interest rate payable by a bond that is fixed at issuance. The coupon is often expressed as a percentage of par value; for example, a $1,000 bond paying $65 per year has a $65 coupon, or a coupon rate of 6.5 percent. "Zero coupon" bonds do not pay interest.

Current yield refers to the annual coupon payment divided by the bond's price, stated as a percent. For example, a newly issued $1,000 bond paying $65 has a current yield of .065, or 6.5 percent. Current yield is variable and can fluctuate. For example, if the price of the bond dropped to $950, the current yield would rise to 6.84 percent.

Yield-to-maturity refers to an estimate of the overall interest rate an investor who buys a bond at the market price will earn if the investor holds the bond until maturity. Mathematically, it is the discount rate at which the sum of all future cash flows (from coupons and principal repayment) equals the price of the bond.